Interoperability refers to the ability of different blockchain networks to seamlessly communicate and share data or assets. Think of it like different languages (blockchains) able to understand and work with each other.
For example, consider Alice using Ethereum to create a decentralised finance (DeFi) application, while Bob prefers using Cronos. Interoperability allows Alice’s application on Ethereum to interact with Bob’s on the Cronos network. This means that assets can move from one chain to another, and actions on one chain can trigger events on another.
Interoperability is achieved through technologies like bridges and smart contracts. Bridges act as connectors between blockchains, facilitating the transfer of assets. Smart contracts, on the other hand, enable decentralised processes by automating actions based on predefined conditions.
Blockchain interoperability opens doors to a world of possibilities, enhancing cross-chain asset swaps, cross-platform gaming, and even cross-border payments, making blockchain technology more versatile and powerful.
Examples of interoperable blockchains include Polkadot, Cosmos, and Ethereum 2.0.
Polkadot is a multichain network that allows different blockchains, known as parachains, to interoperate. It provides a framework for building custom blockchains that connect and communicate with the Polkadot ecosystem.
Cosmos is a network of interconnected blockchains that uses the Inter-Blockchain Communication Protocol (IBC), which enables various blockchains in the Cosmos ecosystem to transfer assets and communicate with each other.
Ethereum’s upgrade included better interoperability with other blockchains through technologies like shard chains and bridges.
